The daily turnover in South Korea's exchange-traded funds market jumped 46 percent last year as investors moved to safer and profitable destinations amid low interest rates, data showed Sunday.

The average daily trading volume of ETFs came to 793 billion won ($747 million) last year, compared with 544 billion won a year earlier, according to the data compiled by bourse operator Korea Exchange.

An ETF refers to an investment fund traded on stock exchanges and represents a basket of stocks that reflects an index. It provides retail investors and institutions with a more liquid and risk-hedging tool. 

The net asset value of ETFs also surged 32 percent on-year to 19.42 trillion won. There were a total of 146 ETFs traded on the main bourse as of December, up 16 from a year ago, the data showed.

ETFs accounted for 19.8 percent of the daily turnover on the main bourse, up from the 11.3 percent tallied at end-2012. In terms of market capitalization, ETFs made up 1.6 percent of the total at the end of last year, up from 1.3 percent a year ago, the data showed.

Retail investors took up 35.9 percent of the trading volume, trailed by foreigners with 27.5 percent and institutions with 20.1 percent, they showed.

Market watchers said investors' appetite for ETFs grew as they sought high-yield investment destinations amid the trend of low growth and interest rates.

Meanwhile, the net asset value of the local ETFs is expected to rise to 21 trillion won this year and 25 trillion won in 2015, according to the bourse operator. (Yonhap News)